Ezion upgraded to Buy by DBS after investment from Temasek-linked fund

DBS upgraded Ezion to Buy from Fully Valued after Temasek-linked Pavilion Capital invests up to S$50 million in the company.

“Ezion is poised to re-rate from its current insolvency valuation,” DBS said in a note on Tuesday, pointing to a successful refinancing exercise, improving utilization and day rates driving an earnings recovery, the confidence boost from Pavilion becoming a strategic investor and potential strategic partners.

“We are more hopeful on Ezion’s turnaround,” DBS said. “While it has also been hit hard by the recent oil crisis, Ezion is among the few surviving players with a niche competitive edge in liftboats, a segment with brighter demand/supply outlook relative to other offshore support vessels.”

It raised its target price to S$0.29 from S$0.13, based on 1.4 times fiscal 2018 book value.

It noted Ezion’s shares were expected to start trading again on April 19.